Top digital asset manager Grayscale Investment has been setting the pace in the Bitcoin market. It has had another great 2020 with a record-breaking performance.
The asset manager announced that institutional investors bought about $3 billion digital assets, with Bitcoin taking a major share of the investments.
Impressive year for Grayscale
According to Grayscale, institutional investors allocated $2.8 billion into its products, with two-third of the yearly Grayscale inflows coming during the last quarter of the year. Again, Bitcoin was the standout performer during the last quarter of the year.
2020 came with a lot of challenges for Grayscale and other asset managers. But it seems Grayscale’s performance last year was totally different from the expected performance. While the financial markets witnessed some turbulent times, Grayscale had one of its best performances last year, primarily due to huge allocations from institutional investors.
In the first three quarters, the asset manager had record-breaking results, but the last quarter was the icing on the cake. According to Grayscale, total investments in the company last year was $5.7 billion, while the last three months of the year saw a total investment of $3.3 billion. This shows that the fourth quarter had about 60% of the total investments for the year, making it by far the highest the company has ever registered in any quarter since its existence.
Grayscale expanding at a rapid rate
The increased investment recorded in Grayscale is an indication that institutional investors have put the asset on a maturing path. However, the market is still very cautious about the crypto asset, because it still has a long way to go before it’s considered an institutional-grade asset.
The price of Bitcoin reached an all-time high of $40,000, and the activities of Grayscale contributed lightly to that bull run. As the Biden administration is preparing for a huge stimulus package, it’s expected that the Bitcoin market will gain more momentum.
However, only the stimulus package will not determine Bitcoin’s upward movement, but a combination of several factors.
Surely, companies like Grayscale Investment may have some influences that will determine where Bitcoin price is headed in the next couple of weeks.
$1.2 billion commutative inflow
Grayscale said it had received a cumulative inflow of over $1.2 billion since it was initiated from 2013 to 2019. This means that the inflows it received last year alone were 500% higher than the total inflows it has received for the past six years.
Also, Grayscale revealed that majority of the inflows last year came from institutional investors who contributed about 87% of the total inflows in 2020 and 93% total for Q4 2020 alone.
The data from Grayscale revealed that Bitcoin had a reflecting turning point in 2020, as the investors looked at digital assets as a hedge over the fluctuating value of fiat currency. More institutional investors became interested to invest more Bitcoin and chose the top cryptocurrency as a long-term store of value.
Litecoin, Bitcoin Cash, and Ethereum Classic are other company products that saw improved inflows last year.
